Real Estate Q&A
We have been looking at houses for the past several months and we are approved to purchase, but we are going with an FHA loan. I heard that I can not purchase through FHA during the government shutdown, as they will not be processing any more FHA loans during the shutdown. First, with the shutdown will they, in fact, be stopping all FHA loans? Second, if that is the case, what are my options? Thanks for the help.
— Ben, Grand Junction.
This is a great question and is very timely as it appears we are at a government stalemate and you echo a question that we have been getting a lot lately. As I usually do, when it comes to lending questions, I rely heavily on my trusted sources in the lending industry. I have consulted James Pulsipher, Mountain Region Vice President, at Fidelity Mortgage to aid me in correctly responding to your question and I think you, and others, will find the answer very thorough and complete!
“FHA loans are still closing and funding. It is very much business as usual right now with HUD/FHA. We don’t imagine significant impact unless the shutdown extends for a long period of time and by that I mean a shutdown of more than 30 days. There are three things that we can’t do, at this point, during the shutdown:
1. RD — they are closed as they are USDA and not considered essential.
2. Verification of taxes through the IRS — if that is needed. We are accepting returns without validation in order to avoid work delays during the shutdown. We are awaiting further guidance from the agencies on that, but that is the present position, and is imagined to continue to be the position barring an extended shutdown. (Again, more than 30 days)
3. Social Security verifications — if you need to supply a verification of Social Security to your lender, those can’t be obtained. It is important to know that most people receiving Social Security have the verification already — as they are sent out each year. You just couldn’t obtain a duplicate during the shutdown.”
As you can see from James’s response, it is business as usual, even if you are going with an FHA loan program for the purchase of your new home. Don’t stress out, but make sure that you discuss the shutdown with your lender to verify their interpretation of the shutdown ramifications. Should we discover this will be an extended shutdown and does eventually impact the FHA loan programs, remember you have the option of a conventional loan. Talk to your lender about those options, should this extend beyond 30 days.
The bottom line for anyone who is in the process of buying a home or looking to buy in the near future: You should always consult your mortgage professional to see if there have been outside changes that impact your particular loan program or loan status. This is a good rule of thumb, even when we are not in a time of government shutdown, but does take on more importance given the current Washington stalemate. Looks like you should be able to proceed with business as usual, even though much of the government can not, but maybe that is not a bad thing! Thanks for the question and sleep easy! (Or at least easier)